The official blog of Illinois Issues magazine,
published by the Center for State Policy and Leadership
at the University of Illinois Springfield

Thursday, March 17, 2011

Republicans pitch cuts

By Jamey Dunn

Senate Republicans today followed up last week’s proclamation that Illinois could potentially face a $22 billion cumulative deficit in five years — which they say would mean an $8 billion operating deficit in fiscal year 2016 — with a proposal for massive cuts to the state budget.

Senate Minority Leader Christine Radogno said her party’s push to cut about $5 billion from Gov. Pat Quinn’s proposed budget would allow the state to pay down its backlog of late bills without borrowing. She said it would also ensure that the income tax increase is phased out by FY 2016. Republicans say that even though Democrats called for the increase to be temporary, Quinn’s spending plan would guarantee that an increased tax rate would have to be extended beyond the five years called for in the legislation.

“Many worthy programs, programs many of us strongly believe in, that we have advocated for would be impacted by our plan. The fact is we have no choice. If we do nothing, the problem doesn’t disappear. It gets worse,” said Sen. Pamela Althoff, a McHenry Republican.

Republicans released a “menu” of $6.7 billion in proposed reductions and say they hope to work with Democrats to approve $4 billion to $5 billion of them. This marks a change in the party’s behavior. Up until now, they have called for serious cuts but failed to provide any specifics. While their proposal is not line-item reductions, it does make specific suggestions and gives hard numbers for reductions in specific areas of government. Radogno said that Republicans are willing to put at least half of the votes needed to pass any of the suggestions from their plan.

The two largest reductions would come from cuts to Medicaid, a state program that provides medical care to low-income residents, and a controversial change to the state’s employee pension system.

Republicans say $1.3 billion could be trimmed from Quinn’s budget, primarily by changing rates paid to doctors for providing services to Medicaid patients and changing the thresholds for eligibility, which would mean fewer residents would be able to access to program. The Republican's written proposal says the state may have to seek a waiver from the federal government to implement some of their suggestions.

The Senate minority party also endorsed a plan that calls for changes to the retirement benefits of current state employees and has been the subject of recent legal debate. They are backing a proposal from the Civic Committee of the Commercial Club of Chicago, which is also supported by House Minority Leader Tom Cross. The legislation would not affect benefits already earned by current employees but would limit future benefits that would be earned after it was enacted. House Speaker Michael Madigan said on the day that Quinn released his budget that he thinks this concept would meet the state’s constitutional requirements to state employees. Senate President John Cullerton disagrees. Radogno said questions of constitutionality shouldn’t stop lawmakers from trying to make a change that could save the state $1.35 billion. “If it need to go to court, it needs to go to court. This is problem we can’t be timid about,” Radogno.

While Republicans said education is a top priority, the plan calls for a $725 million reduction in K-12 spending from Quinn’s proposal. The plan calls for changing the way the state calculates so-called poverty grants, “streamlining of high school and elementary districts” and eliminating Quinn’s proposed $40 million restoration of early childhood funding, which was cut last fiscal year.

Senate President John Cullerton indicated that he was willing to work with the Republicans to find cuts. However, he did not offer support for any specific areas of the proposal. “We applaud the Senate Republicans for coming to the table with suggestions on how to mend our fiscal crisis. It’s nice to hear them say something other than ‘no.’ Nevertheless, their efforts must go beyond more than press releases and photo ops. Releasing a list of possible cuts shouldn’t be the end of their participation in the budget process. I hope that this is just the beginning,” Cullerton said in a written statement. “To that end, I am reserving a series of appropriations bills for their use in hopes that they will use this opportunity to fully engage in the appropriations process. I believe that their proposals and commitment can be the baseline for discussion on what we all agree is a necessary process of cutting waste and creating efficiencies.”

Quinn appears less receptive to some of the proposals, noting that cuts to programs like Medicaid would mean that Illinois would miss out on federal matching dollars.

“We appreciate the Senate's effort to identify additional savings. The challenge, however, is not coming up with myriad possibilities. As we examine their proposals, we must look at their consequences. If Illinois were to implement the cuts proposed today, Illinois would miss out on millions Illinois taxpayers have sent to D.C. in taxes; legal action would be taken against the state for violations of funding statutes, and conflicts of interest would be codified into state agencies; and economic recovery efforts that are creating jobs would be halted in their tracks,” Quinn said in a written statement.

No comments:

About Me

The bureau follows state government from the Capitol Press Room and writes articles for Illinois Issues magazine, published by the Center for State Policy and Leadership at the University of Illinois at Springfield.
Contact: illinois.issues@gmail.com